WASHINGTON -- The National Retail Federation filed an appeal last week to a $5.7 billion antitrust settlement between merchants and Visa and MasterCard over credit card transaction fees. A federal judge approved the class-action settlement in December.

The agreement, described as the largest settlement of an antitrust case, was reached in 2012, ending eight years of litigation. Retailers and trade groups that represent them sued the payment networks, and banks that issue their cards, in 2005, charging that they conspired to set unfairly high interchange fees, known as "swipe" fees.

The settlement called for the defendants to initially pay up to $7.25 billion to as many as eight million merchants, but that figure dropped to $5.7 billion after some 8,000 merchants rejected the proposal and opted out of the class-action suit. In addition, Visa and MasterCard agreed to temporarily lower interchange rates on credit-card transactions by an amount equal to $1.2 billion.

Calling the settlement "deeply flawed," the NRF is asking the 2nd U.S. Circuit Court of Appeals to overturn U.S. District Judge John Gleeson's recent ruling in a lower court to the eight-year-old case. NRF's chief concern is that the deal would make it virtually impossible for retailers to sue the payment networks in the future if they introduce new anticompetitive policies.

"The settlement does nothing to reform the price-fixing payments system that has let credit card swipe fees skyrocket over the past decade and nothing to keep them from continuing to soar in the future," charged Mallory Duncan, NRF senior vice-present and general counsel, upon announcing the Jan. 2 appeal.

The settlement also eliminates rules that prohibited merchants from charging customers a fee for paying with a credit card. But NRF does not see this as a fix to lowering fees. "That is absolutely the opposite of what retailers sought, and major retailers have soundly rejected surcharging," Duncan said.

In approving the settlement, however, Judge Gleeson said the settlement does not prevent merchants from suing Visa and MasterCard over new rules they may put in place. The rules "do not release the defendants from liability for claims based on new rules or new conduct or reversion to pre-settlement practices," he wrote in an order filed in U.S. District Court in Brooklyn, NY, in December. "They appropriately limit future damages claims based on the pre-settlement conduct of the networks."

The judge also said the rule changes will help merchants to exert pressure on the payment networks to lower their fees. "For the first time, merchants will be empowered to expose hidden bank fees to their customers, educate them about those fees and use that information to influence their customers' choices of payment methods," he wrote.

Retailers benefited from 2010's Dodd-Frank financial-overhaul legislation, which included a provision that cut interchange fees in half for debit-card transactions, but that rule didn't affect fees on credit-card transactions.